Top public servants in pay bonanza

The federal government has defended double-digit pay increases for top bureaucrats even as it fights rises for ordinary public servants that would only cover inflation.

Special Minister of State
Gary Gray
also ruled out publishing annual “fair pay" reports showing how much agency and department heads earn as a multiple of the lowest paid person in their organisation – a key recommendation of a recent public sector remuneration review in the United Kingdom.

Annual reports tabled last week in Parliament reveal that in the 2010-11 financial year several department heads received pay increases well in excess of the 4.1 per cent recommended by the independent Remuneration Tribunal.

Some of the biggest increases in total annual remuneration went to the heads of the Office of the Renewable Energy Regulator (up 37.5 per cent to $230,771), the Australian Broadcasting Corporation (up 17.3 per cent to $758,059) and the Australian Office of Financial Management (up 17.2 per cent to $314,000).

The pay of Australia Post managing director
Ahmed Fahour
, set by the board of the government business enterprise and not the Remuneration Tribunal, nearly doubled in 2010-11 to $2.9 million, which included a cash salary of $1.4 million.

The tribunal is increasingly making exceptions to its general determinations as it seeks to close the executive pay gap between the public and private sectors.

In June it approved a 3 per cent general increase for senior public servants for 2011-12.

Two months later, the tribunal granted 22 per cent increases to the chiefs of the three corporate regulators – the Australian Prudential Regulatory Authority, the Australian Securities and Investment Commission and the Australian Competition and Consumer Commission – taking their annual remuneration to between $700,000 and $800,000.

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The tribunal will also make individual determinations for the Chief of the Defence Force, Commissioner of ­Taxation, Auditor-General, Australian Statistician and Customs chief executive before the end of the year.

A spokesman for the Special Minister of State said media reports that these agency heads would receive similar increases to the top corporate regulators were “speculative".

Customs workers are taking industrial action in response to a 3 per cent pay offer they claim will not cover inflation, which is now running at 3.6 per cent.

Community and Public Services Union national secretary Nadine Flood said the 89,000 public servants on or below average weekly earnings “are reasonably shocked that their agency heads are being offered pay rises of 20 to 50 per cent at a time they are being offered 3 per cent".

“There is no doubt that public service agency heads are running large organisations and should be paid appropriately," she said.

“However, giving agency heads pay rises of up to $300,000 a year at the same time they are rejecting consumer price index increases for employees on average weekly earnings seems a bit rich."

Ms Flood said the government could not shift responsibility for big increases in top public servants’ pay to the Remuneration Tribunal.

“Government is making these decisions, including what matters are dealt with by the Remuneration Tribunal. They therefore bear some responsibility for the outcomes from the tribunal," she said.

The recent UK public sector pay review led by Will Hutton rejected a ban on managers earning more than a specific multiple of their lowest paid staff as “unfair", since people at the top of large and complex organisations with low-paid workers could earn less than managers with easier jobs.

The Hutton review recommended the UK government publish annual reports setting out pay multiples across the public service and identifying agencies that fail to provide adequate explanations for large rises in executive pay.

Mr Gray’s spokesman said: “There is already a high level of transparency and rigour in remuneration arrangements in the Australian Public ­Service."

Ms Flood agreed executive remuneration in the Australian public ­service was already more transparent than in the private sector in Australia, but said that the government should consider the Hutton review’s ­recommendations.